Overview of China Plastic Component Manufacturing Market

Plastic is defined as a synthetic material made from a wide range of organic polymers that can be melted and moulded into a desired shape and set into a stable form with the use of plastic mould. In general, plastic can be categorized into thermoplastic and thermosetting plastic. The former one can be remelted into liquid while the latter one always remains a permanent solid state. Common characteristics of plastics include (i) chemical resistance, (ii) outstanding insulating properties, (iii) light, (iv) ease of processing and (v) wide range of application.

Market size of plastic components manufacturing

With plastic moulding witnessing a significant growth from CNY 109.2 billion in 2011 to CNY 176.0 billion in 2016, representing a CAGR of 10.0%. The expansion of plastic mould fabrication market as well as strong demands of application sectors serve as key drivers to the plastic components manufacturing market and it is expected to grow at a CAGR of 8.8% during 2017 to 2021, reaching CNY 262.5 billion by 2021.

Application in downstream sectors

Office Electronics. Plastic mould is required for the manufacture of parts and cases of office equipment including printing machines, fax machines and monitors. According to National Bureau of Statistics, the production volume of photocopying and printing machines has shown a moderate growth from 6.6 million units in 2011 to 6.8 million units in 2016, representing a CAGR of 0.9%. However, production volume of fax machines has recorded a mild decline at a CAGR of -0.9% during the same period of time. Due to the advancement of display technology, the production volume of monitors in China has increased from 126.8 million units in 2011 to 173.7 million units in 2015, representing a CAGR of 8.2%. Substantial demands for plastic mould and plastic components are expected in the future.

Furniture. The furniture market in China has witnessed an expansion during recent years due to the growing demand of residential and commercial sectors, which increasingly consider furniture as a necessity in business and office environment. With the rising income level and quality of life, manufacturers are dedicated to produce furniture with new designs and the use of plastic materials are recognized as a key trend due to specific properties such as light weight, easy process of mould and colour. According to the National Bureau of Statistics of China, the revenue of furniture manufacturing industry and retail sales value of furniture in China increased at a CAGR of 11.4% and 18.7% respectively during 2011 to 2016. The growth indicated that there is a growing consumption of plastic components.

Home Appliances. Driven by the rise of population and urbanization as well as growing demands for consumer goods, the production volume of home appliances in China has shown a significant growth over the past five years. The production volume of home appliances including colour television, household washing machines, air conditioners and household refrigerators has witnessed growth at a CAGR of 7.0%, 2.7%, 2.9% and 1.2% respectively during 2011 to 2016. It is expected that the plastic mould and moulding market in China is expanding along with the higher output of home appliances in the country. The rising urban population and improvement of income level serve as key drivers for the demand for home appliance. In particular, the large base of population underpinned the penetration of home appliance. According to the National Bureau of Statistics of China, the total population of China increased steadily from 1,347.4 million in 2011 to 1,374.6 million in 2015. On the other hand, home appliances underwent a diversification in terms of design, appearance, size and function with a shift towards high-end segment as featured with higher spending on such products. The retail sales value of home appliances, audio and video equipment increased from CNY 537.4 billion in 2011 to CNY 900.4 billion in 2016, according to National Bureau of Statistics. The emergence of Smart City, including Smart Home which covers intelligent control of home appliance and setting, contributes to the new product development and design, resulting in higher consumption of plastic mould.

Communication Equipment. Plastic mould and injection moulding is commonly applied to production of cases, parts and packaging of communication products. The market size of communication equipment manufacturing by revenue has recorded a significant growth at a CAGR of 25.3% during 2012 to 2015. Similarly, the retail sales value of communication equipment has registered a more substantial growth at a CAGR of 29.5% during 2011 to 2016. Furthermore, the production volume of mobile phones increased from 1,143.0 million units in 2011 to 2,261.1 million units in 2016, representing a CAGR of 14.6%. The diversification in design of communication equipment such as mobile phones, parts and accessories contributes to the demand for a variety of plastic mould for the manufacturing of these plastic items. Thus, the consumption of plastic products for communication equipment is anticipated to increase in the future.

Automobile. Automobile is considered as one of the key downstream application sectors for plastic mould, as some of the essential interior parts are made from plastic. According to National Bureau of Statistics, the production volume of vehicles in China has increased from 19.2 million units in 2011 to 28.2 million units in 2016, representing a CAGR of 8.0%. Similarly, the number of newly registered vehicles in China has increased from 16.2 million units in 2011 to 23.3 million units in 2015, representing a CAGR of 9.5%. Furthermore, as extracted from Trade Map, the export value for vehicle parts in China has shown an overall growth from USD 21.2 billion in 2011 to USD 25.5 billion in 2016, which represents a CAGR of 3.8%. As a result, the expansion of automobile production and application in China underpinned the growth of the plastic mould and moulding market.

Production of automobile involves the assembly of a number of components and parts for various systems within a vehicle. In view of the growing trend of environmental awareness and emergence of electric vehicles, plastic has been used as a substitute for traditional metallic materials in some core systems such as power and transmission systems, fuel tanks to achieve fuel economy. As set out in the “Energy-saving and New Energy Automotive Industry Development Plan (2012-2020) (《节能与新能源汽车产业发展规划(2012-2020年)》) ” announced by the State Council, the number of pure and plug-in hybrid electric vehicles is estimated to reach five million units by 2020. Furthermore, automobile manufacturers in China have put a higher emphasis on the improvement of performance and appearance of vehicles to meet the increasing demand for high end vehicles in the country, which offers a good opportunity for plastic mould with high quality.